I’m going to have to eat my words on this question a little bit.
If you’ve spent anytime around here, you have probably heard me say that the main reason you buy life insurance is to “protect your loved ones from your future financial commitments.”
While that’s a true statement, todays question uncovers a way YOU can actually see a financial benefit from your life insurance benefit.
But you’re not going to like it, and I hope you never have to consider using it.
It’s called the accelerated death benefit rider, us insurance folk have to come up with a fancy name for everything.
This is a “free’ add-on to your life insurance policy that will allow you to borrow up to half of your death benefit if you ever become terminally ill.
Accelerated Death Benefit Details
Of course, there are a few finer points you need to be aware of before you run off to grab your check.
The first is that, even though I just said half the death benefit, that will max out at $250,000.
That means if you have a $100,000 life insurance policy you can get $50,000. However, if you have a $1,000,000 policy you will only be able to get $250,000.
Like I said above you need to be terminally ill AND have a life expectancy of 12 months or less.
Now might be a good time to temper the excitement you had at the beginning.
The purpose of this money is to do with it whatever you want.
Most commonly it is used to pay for excessive medical bills or pay off a mortgage.
Note: All companies are different, but all money is discounted at present value and is actually like taking out a loan against the policy, which will be deducted from death benefit.
That means if you borrow $50,000 from your $100,000 policy you will only have $45,000 left in the death benefit because you have to pay whatever the going interest rate is at the time you borrow the money.
Watch the short video below for a better understanding on the Accelerated Death Benefit and what your options are if you ever need it.
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If you would like some help with your life insurance or want to make sure I'm a real human being, you can send me an email, give me a call at 440-964-8211 or talk face to face over the internet.
Giangola Insurance Agency, Inc.
1000 Lake Ave.
Ashtabula, OH 44004
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